Royal Mail workers to strike in London next week

The planned sale was part of a package under which the government committed to absorb a Royal Mail pension fund deficit estimated at 9 to 10 billion pounds.

The government indicated on Thursday that, with the part-sale on hold, it would not step in to deal with the pension fund deficit in isolation.

"The government cannot be expected to take responsibility for the pension deficit if the other challenges facing Royal Mail are not also addressed," a spokesman for Prime Minister Gordon Brown said.

(Reporting by Adrian Croft; Editing by Peter Griffiths)